Pence's battered agenda heads into homestretch

Gov. Mike Pence laid out an ambitious 2014 legislative agenda. Here are some of his top priorities and how they've fared so far in the General Assembly.

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Business personal property tax

Proposal: Phase out the business personal property tax.

Status: A House plan would give counties the option of eliminating the tax on new equipment, but since most counties oppose the idea the measure is unlikely to go very far in accomplishing Pence's goal. A Senate plan would eliminate the tax for businesses with less than $20,000 in equipment, which would only cut a tiny fraction of the annual $1 billion tax. (House Bill 1001 and Senate Bill 1)

Preschool voucher program

Proposal: Establish a preschool voucher program for children from low-income families.

Status: The House proposed a program that would have provided vouchers for 1,000 students, far less than the up-to 40,000 Pence envisioned. Despite personal testimony from the governor, a Senate committee sent the proposal to a summer study committee. (House Bill 1004)

Highway expansion

Proposal: Invest $400 million in highway expansion.

Status: The House agreed to release $400 million for major highway projects, though $25 million would be reserved for local governments. The Senate's version of the bill, however, would release only $200 million. (House Bill 1002)

Personal and dependent tax exemptions

Proposal: Index personal and dependent tax exemptions to inflation.

Status: The House passed a bill that would index income tax exemptions to inflation and increase the child exemption from $1,500 to $2,000. The Senate has not acted on the bill. (House Bill 1211)

Adoption tax credit

Proposal: Create an adoption study committee and a state tax credit for adoption.

Status: The House passed a bill that would create a state adoption tax credit and a study committee. The Senate is poised to pass the bill. (House Bill 1222)

Teacher innovation fund

Proposal: Set up a teacher innovation fund and a teacher choice program.

Status: A proposed teacher innovation fund failed to get a hearing. Another measure, as initially proposed, would have established a stipend of up to $10,000 for teachers who move to low-performing public schools or charter schools that serve low-income students. But a Senate committee stripped funding from the bill. (Senate Bill 337 and Senate Bill 264).

Indiana Governor Mike Pence thanks students for a hand-drawn picture of him while visiting the pre-school classes at Shepherd Community Center, 4107 E. Washington Street on Wednesday, February 26, 2014. Pence is passionate about the importance of legislature passing a pre-school voucher pilot program, a proposal which has been changed in the Senate to a study commission.(Photo: Matt Detrich/The Star)

With his top legislative priorities on the rocks, Gov. Mike Pence has his work cut out for him if he wants to rescue them before the end of the 2014 General Assembly.

With just two weeks left in the session, his preschool voucher program could be headed for a summer study committee, his efforts to phase out a key business tax have received only token support, and Senate Republicans have cut in half his request for $400 million in highway funding.

Other Pence proposals also have encountered problems.

He wanted to offer stipends to teachers willing to work at low-performing schools, but a Senate committee stripped funding from that proposal. He wanted to increase family income tax exemptions with inflation, but that idea is stalled in another Senate committee. And he wanted to create a fund to reward innovative teachers, a proposal that didn't even get an initial hearing.

The reason for most of the opposition can be summed up in one word — money — and attributed largely to one man: Senate Appropriations Committee Chairman Luke Kenley.

In even-numbered years, legislators typically don't open up the state's biennial budget. Yet nearly every one of Pence's priorities would have a significant effect on the budget.

That has created tension between those charged with watching out for the state's fiscal health and those who want to be able to point to a list of accomplishments.

It's a point of contention that goes back at least to early December, when Pence announced his goals for the 2014 session.

"I warned him," said Kenley, R-Noblesville. "I said, 'Now this is going to be part of the problem here, doing this in a nonbudget year,' and he understood that, but he thought the issues were important enough that we should begin the discussion."

Making his case

Despite concerns such as Kenley's, Pence has forged ahead.

He took his pitch on the road in December, making his case to crowds across the state. A few weeks ago, he made a rare personal appearance before a skeptical Senate Education Committee to testify on behalf of his preschool proposal. And when a coalition of local government officials objected to his proposal to cut the state's business equipment tax — which provides $1 billion a year for cities, towns, counties, schools and libraries — he agreed to replace some of the lost revenue with state money.

So far, those efforts have yielded only qualified successes.

A Senate committee agreed to study the preschool program but has refused to sign off on a small pilot program. Both chambers are considering small cuts to the business tax, but nothing like a complete phaseout.

The legislature has bucked Pence on other issues, too, disregarding his call to put a highly contentious debate over a constitutional same-sex marriage ban on the ballot this year.

Instead, lawmakers made a change that will prevent the ban from going before voters until at least 2016, when presumably Pence would be running for his second term.

The "time to act is now," Pence said repeatedly, emphasizing that the pilot program can be done at the same time as a comprehensive study.

While changes have been made to many of the governor's legislative priorities, Sean Keefer, his legislative director, is not discouraged.

"We feel that we're moving in the right direction at the right pace, and we're getting where we need to be," he said. "The governor is very pleased with the movement on many of our bills."

Concerning the business tax, Keefer said the House and Senate are getting closer to an agreement that won't shift taxes from businesses to individuals and won't harm local communities — two parameters Pence set.

"When you propose a large idea, some of these tax discussions can take years or decades," he said. "For us to move this far this soon, we actually feel the governor has taken a leadership role."

Language from some of Pence's other proposals that have stalled could be inserted into bills that are still alive, Keefer said.

Republican divide?

Despite the optimism from the Pence camp, some political observers question the governor's effectiveness, given that his Republican Party has super-majorities in both chambers.

"You would expect him to have a far better track record," said Andy Downs, a political scientist at Indiana University-Purdue University Fort Wayne.

"I think it's safe to say he's not having a particularly good year. You might say he took on way too aggressive an agenda and is paying the price now."

That could catch up with Pence, who won't rule out presidential aspirations.

"If you think about this from a national political perspective, those aren't going to be big enough victories," Downs said. "If you're going to swing big, something has to leave the park."

But the success or failure of Pence's legislative agenda may not have as much impact as some may think over future political races, said Margaret Hershey, a political science professor at Indiana University-Bloomington.

"In contemporary American politics, a political candidate is not necessarily judged by whether they got their proposals through legislatures, because legislatures are so polarized," she said.

Pence has been deliberately vague about how to carry out his proposals, often saying his job is to establish "guardrails" for lawmakers.

"If you don't offer specifics, you can't be criticized for having failed in the legislature," Hershey said. "It's an effective strategy if you want to avoid analysts determining how successful you were."

Moreover, Pence could be simply laying the groundwork for next year's session, Downs said. With summer study committees on key issues and the budget on the table, the governor could be well-positioned to bring home the political prizes he seeks.

Complex issues take time to digest, and Pence appears to be taking the long view, Kenley said.

"He's willing to perhaps face the idea that somebody on the outside who wants to measure this might say, 'You didn't get everything done on your agenda, so you flunked this year,'" he said. "He thinks the issues themselves are worthy of putting on the table — and he thinks that maybe the tension that's created by the discussion is necessary to come up with a productive result."

Pat Kiely, president of the Indiana Manufacturers Association and a former House Ways and Means Committee chairman, said it's too early to judge Pence's results because the legislature is really only getting started — even though there are only two weeks left.

"The legislature is like the NBA and NASCAR," Kiely said. "The last 10 laps are what really matters."